United States

The retail giant sank 6.5% after warning of economic uncertainties, echoing last week’s weaker-than-expected retail sales data. The cautious outlook weighed on sentiment, dragging down other consumer stocks and sending financials lower, with JPMorgan Chase & Co. and Goldman Sachs Group Inc. each shedding over 4%.

The S&P 500 slipped 0.6%, while the Dow Jones Industrial Average lost 1.3%. The Nasdaq 100 fell 0.8%, pressured by profit-taking in high-growth tech names. A broader pullback in financials saw the KBW Bank Index slide 2.5%, with concerns over slowing credit growth and rising delinquencies.

Yields on 10-year Treasuries declined three basis points to 4.50% as investors sought safety in bonds. The Bloomberg Dollar Spot Index dropped 0.7%, while the Japanese yen led gains among major currencies, boosted by speculation that the Bank of Japan may raise rates sooner than expected.

Despite a strong 2024, US stocks have struggled to maintain upward momentum, with the S&P 500 failing to sustain breakouts at record levels. “A correction may soon be necessary to restore a more attractive valuation for US stocks,” said Fawad Razaqzada at City Index and Forex.com. Traders are also watching for signs of slowing demand from retail and institutional investors, which could lead to weaker inflows into equities in the coming months.

Note: U.S. market prices are as of 7:30 a.m. Sydney time (3:30 p.m. NY).

Europe

European equities tracked Wall Street lower, with the Stoxx 600 falling 0.2% as mixed corporate earnings and geopolitical uncertainties weighed on sentiment. A cautious tone from the European Central Bank regarding future rate cuts added to market jitters, while renewed trade tensions with the US further dampened appetite for risk.

Germany’s DAX 40 slipped 0.3%, pressured by weakness in consumer and industrial stocks. In France, Carrefour SA tumbled 8.8% after providing lacklustre guidance, while Airbus SE fell 2.3% after striking a cautious note on 2025 deliveries. Conversely, Schneider Electric SE jumped 3% on stronger-than-expected fourth-quarter results, and Centrica Plc climbed 5.6% after announcing higher shareholder returns.

Geopolitical risks also loomed large, with Ukrainian President Volodymyr Zelenskiy meeting with US special envoy Keith Kellogg. While details were scarce, the absence of a joint press statement suggested ongoing tensions. Meanwhile, upcoming German elections pose another risk for European markets, with potential political shifts impacting fiscal and trade policies.

Bond markets remained volatile, with Germany’s 10-year bund yield falling two basis points to 2.53%. The euro rose 0.7% to $1.0494, while the British pound strengthened 0.6% to $1.2658.

*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.

Commodities

Oil prices edged higher, with Brent crude up 1.1% to $76.86 per barrel, while WTI crude gained 0.4% to $72.57 per barrel. Gold rose 0.2% to $2,937.80 per ounce, supported by a weaker US dollar.

Iron ore advanced 1.7% to $108.55 per tonne, rebounding after recent declines. Bitcoin climbed 2.9% to $98,374, continuing its strong year-to-date performance.

The Australian dollar strengthened 0.9% to US64.02¢, tracking gains in risk assets. Meanwhile, the 10-year Australian bond yield was little changed at 4.52%, aligning with US Treasury moves.

Economic Calendar

• New Zealand: January trade balance
• Eurozone: HCOB Manufacturing & Services PMI
• United States: S&P Global Manufacturing & Services PMI, Existing Home Sales, Consumer Sentiment